Accept Credit Cards from Vacation Rental Guests
Probably every single property owner can testify as to the complexity of owning
a rental property. It sounds simple and easy, but the truth is that a lot of work
goes into it. From finding guests, keeping the property and the surroundings clean,
securing the premises to getting paid and making payments for taxes and fees, they
all add up to your work as a property owner. So, the more you can reduce some of
these processes, the less work you will have to do.
One of the obvious places where any owner looks is
accepting payments. You
must find a way to balance flexibility and risk. You don't want to be too fixed
in your ways to push the guests ways, and you don't want to be too relaxed
so as to open yourself to bad debts. And definitely the last thing you want to do
is to chase your guests with collections.
This is where credit cards come to save
you! Credit cards are backed up by large financial institutions.
Their role is to manage the security of the transactions and therefore taking the
risk from your hands. So, partnering with such a company is paramount to your rental
business success. A majority of travelers will only pay by credit card. They will
charge the airfare, train, lodging, food, and so on. If you do not accept credit
cards you will probably miss the opportunity of getting these visitors who don't
even send you an inquiry since you do not accept cards.
The good news is that Vacation Rentals Lounge has partnered with one of the larges
merchant account providers,
Authorize.Net. By doing
so, we streamlined the application process and we allow you to get the full benefit
of a merchant account and a virtual terminal.
If you are convinced
click here to accept credit cards, or look at all the advantages
and disadvantages of accepting cards to get a better understanding:
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Benefits of accepting credit cards:
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- Creating credibility - To understand this you must change the viewpoint and see
the situation from the renter's perspective. He/she would have to send you cash
or a check, even though they never met you and they have no idea where the money
is really going. By accepting cards you tell the renter that you have a relationship
with a financial institution and any transactions are done in a secured manner.
- Increase convenience - How many people are still paying by check or money order?
Well, there are a few, but I can guarantee you that they would prefer to pay by card.
The convenience of taking the card out of the wallet, filling up a form and clicking
'Pay' is priceless. You will immediately see an increase in your inquiries.
- Speed-up the booking process - When you only accept cash and checks you actually
need to wait until they arrive or clear in your bank before you can confirm to your
renters that the place is now reserved. Depending on where your renters are coming
from, this could take from a couple of days up to a week. In this time, both you
and the renter are waiting. With credit cards, the transactions are immediate and
you can see the results in the merchant panel. Faster bookings means less idle time
for your property.
- Cash-flow benefits - The speed of the payments also help your cash-flow directly.
All merchant accounts deposit charges in your bank within 24-48 hours. Having money
in your bank faster allows you to manage your expenses easier and not keep any vendors
unpaid.
- Save time - With all your payments being electronically deposited into your bank,
now you don't have to go to the bank every few days to deposit your checks. Every
trip you saved is a direct benefit to you.
- Gain access to international travelers - If sending money or cash is hard for
domestic guests, imagine the hassle from people abroad. US is a big traveler's destination
and with credit cards you open them the door to your property. You don't need to
worry about exchange rates and international transfer fees. Your bank and merchant
account provider takes care of that.
- Simplify refunds - Usually you have to refund deposits or even full payments,
if the guests decided to cancel the trip that was prepaid. By using credit cards,
you simple use the web-based virtual terminal to select a card and send the refund
directly to that card. Again, save time and money by not cutting and sending checks.
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Disadvantages
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- Fees - usually a merchant account has associated fees. There is a sign-up fee
and a monthly fixed fee. On top of that, there is a fee per transaction. Usually
the merchant account will provide a detailed sheet of fees. A simple calculation
will show that the advantages mentioned above cancel quite quickly this particular
drawback.
- Application - getting a merchant account requires you to fill-in an application
with a merchant account provider. This is very similar to a loan application. Basically
the merchant account provider wants to make sure that you are a trustworthy businessperson
and someone that they would like to be in business with. However, the applications
are usually short, on-line and have a response time of a few days.
- Chargebacks - Just as you can send refunds to the guests directly to their cards,
the guests themselves can call their credit card company and ask them to reverse
your charge. This is a very rare phenomena, but it still happens. You can protect
yourself from such an issue by having the proper rental agreement in place that
specifies that charges are not refundable and by maintaining proper records of all
transactions. I hope you are now convinced and understand the importance of accepting
credit cards in today's day and age. So, wait no more: Start accepting credit cards
from your vacation rental guests today!
Does this look too complicated? No problem! Try a simpler solution: Open a PayPal
account!
